What Exactly Are Closing Cost?

If you are considering the purchase of a home, you know that there could be

a downpayment requirement (unless you are a Veteran, or you are purchasing in a rural area that qualifies for USDA Home Loan Mortgages)… and you might be aware that there will be “Closing Costs.”  Your REALTOR might have mentioned that you are going to ask the Seller to pay some or all of those costs… but WHAT ARE THEY?

The Federal Reserve Board refers to them as “Settlement Fees.” They are, in fact the fees you pay to the various agencies and service providers who work to get the title of the home transferred into your name.

So, obviously there’s a credit report, and you pay for that.  There’s an appraisal on the property, and a fee of @$375 for that (today).  For a comprehensive list of the types of fees, click here.

IN GENERAL (this is just MY rule of thumb)… You will need to budget 3% of your home’s value in closing costs.  You might have less – but you will generally have 6 months of taxes in escrow, and you have to pay your homeowner’s insurance a year in advance.

You might not need that much, but if you are a first time homebuyer counting pennies – I would rather come up with a few extra dollars at the end!

If you want to get Pre-Qualified for a mortgage in NC, call Steve and Eleanor Thorne, we have some of Today’s Best Mortgage Rates!  919-649-5058